China’s stimulus package holds promise
Slow, painstaking improvement is probably the only way the country’s property market and local government debt are ever going to right themselves
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CHINA’S policymakers have implemented their most vigorous stimulus initiative in years, commencing with a series of monetary measures on Sep 24 that include interest rate reductions, reserve requirement adjustments, property market easing and capital market support.
Just two days later, top officials followed up with direct pledges to stabilise the property sector and ramp up fiscal spending in a surprise September Politburo meeting focused on the economy and chaired by President Xi Jinping.
At the meeting, China’s top leaders explicitly pledged to “stop the property market from falling”. This is the first time that a high-level meeting like this has so directly and specifically mentioned such a target.
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